Older readers will recall that, a few weeks ago, I quoted the governor of the Bank of England's reference to the racehorse "Quantitativeasing" and its unbeaten record.

Now, at a time when there is much interest, and some confusion, about where the Bank goes from here with this policy (of easing credit conditions by buying government securities, thereby injecting liquidity into the economy), my old friend Christopher Fildes, a great expert on finance and horses, has drawn my attention to an ominous development: yes, you have guessed it, Quantitativeasing has lost that unbeaten record. It was beaten recently at Kempton Park when starting as an odds-on favourite.

Let me explain. There is as much confusion outside racing circles as to what the phrase "odds-on" connotes as there is about quantitative easing. Most political commentators say "odds-on" when they mean "odds-against". If a horse or political party is quoted at, say, 7-2 "on", that means it has, or is considered to have, a red-hot chance of winning – so much so that one is risking £7 to win £2 (or multiples of those sums).

I chose 7-2 as my example because I have never backed an odds-on favourite since the English and Irish Derby winner Santa Claus failed to produce extra presents for his followers when losing, at 7-2 on, in the King George VI and Queen Elizabeth Stakes at Ascot, a very long time ago.

Now, with regard to the Bank's quantitative easing, there is uncertainty about where it goes from here, but there is no uncertainty about the views of such distinguished "inflation hawks" as Sir Samuel Brittan, who indubitably backs Mervyn King over concerns about the durability of what is laughingly referred to as "the recovery".

In a speech to University College London, nicely entitled "Keynes, the Universe and Everything", Sir Samuel said: "Faced with the threat of depression, governments have every justification for borrowing from central banks – 'printing money' if you like. If this means continuing or even increasing so-called quantitative easing so be it."

One gathers that shadow chancellor George Osborne and his merry band of instant deficit cutters are influenced by what they regard as the courage of the then Sir Geoffrey Howe in cutting the public sector deficit in his budget of 1981, during what was then the greatest recession since the 1930s. I have my own views about that budget. But, as Brittan points out, inflation then had been running at 15% "and it was a priority to reduce it".

Brittan – never dovish on public sector deficits in normal times – commented in his UCL speech: "There is no comparison with the present position, when underlying inflation is around 0% to 3%, world real interest rates are near zero and there are masses of savings (both actual and hypothetical at full employment levels of world income) looking for a safe home."

Now, most economists, even those who want immediate action to cut the budget deficit, are agreed that fiscal policy – toleration of that deficit via higher public spending and lower tax receipts – has played an essential role in preventing outright depression.

Which brings me to a recent letter written to another Sunday newspaper by 20 economists calling for "a credible plan" to reduce "the structural budget deficit" more quickly than the present government is planning, and in the course of the next parliament.

To me, this seems a tall order. The present government seems to be ambitious enough in aiming to halve the overall deficit within four years. I wonder how "credible" it can be to reduce the "structural deficit" even faster. The structural deficit is supposed to be that part of the deficit which is not attributable to the recession, but to the bad behaviour of Gordon Brown when chancellor in letting things get out control and believing in his own myth.

It goes without saying that many of the people now criticising him were full of praise for Brown at the time. Just like my old friend Nigel Lawson not long before him, he was feted as the greatest chancellor since Walpole.

This ground will be gone over in the forthcoming BBC TV programme on the Treasury by Michael Cockerell (Part Three of TheGreat Offices of State, 9pm, BBC4 on 25 February). In it, Lord Lawson says that "control of public spending is at the very heart of the Treasury – what it's all about".

Lawson, who spent most of the 1980s there, first as financial secretary (1979-81), and later (1983-89) as chancellor, ought to know. He regarded the department as "instinctively hostile to reductions in taxation" partly because officials believed ministers would not necessarily cut public spending in order to pay for tax cuts.

Some of the economists arguing for early action to cut the deficit are fiscal conservatives, who would like to finance tax cuts with spending cuts. Others just want to cut the deficit. The structural deficit that concerns them is the embodiment of what went wrong when no one in the Treasury told the emperor that he had no clothes, and the Treasury, in Lord Lawson's words, "forgot what it was all about".

My own view is that fiscal conservatives ought to take a look at Scandinavia. Many of the UK's social and infrastructure problems arise because the nation is not prepared to pay for the public sector it needs. But what particularly concerns me at present is that the Treasury itself may be rediscovering "what it's all about" at just the wrong time, and is being urged on by all those outside "deficit cutters".

The real lesson of Brown's chancellorship is that once we are out of this mess, chancellors should never again be allowed to play fast and loose with public spending when "prudence" suggests otherwise.

But we need to get out of the mess first, and, if anything, the danger is that the crisis is far from over. Just look at the unemployment figures ...